Stesalit Limited, Kolkata V. A.C.I.T., Circle - 8(2), Kolkata, Kolkata

ITA 749/KOL/2022

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Stesalit Limited filed appeals against the orders of the National Faceless Appeal Centre for three different assessment years. However, the company had previously undergone a resolution process under the Insolvency and Bankruptcy Code, where the NCLT, Kolkata approved a resolution plan that led to the extinguishment of all financial and other claims against the company. This resolution was effective from July 20, 2018, the date of the NCLT order. Consequently, the Income Tax Appellate Tribunal found the appeals to be infructuous as the company's tax liabilities had been resolved and extinguished under the approved resolution plan.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132585 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-02-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 19-12-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 250

Judgement Text

| आयकर अपीलीय अिधकरण ᭠यायपीठ, कोलकाता | IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE DR. MANISH BORAD, HON’BLE ACCOUNTANT MEMBER & SHRI SONJOY SARMA, HON’BLE JUDICIAL MEMBER I.T.A. No. 747/Kol/2022 Assessment Year: 2012-13 I.T.A. No. 748/Kol/2022 Assessment Year: 2014-15 & I.T.A. No. 749/Kol/2022 Assessment Year: 2017-18 Stesalit Limited DBS Business Centre DBS House 10/2 Hungerford Street Kolkata - 700017 [PAN : AAECS0758A] Vs Asstt. Commissioner of Income Tax, Circle-8(2), Kolkata अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) Assessee by : None Revenue by : Shri P.P. Barman, Addl. CIT D/R सुनवाई कᳱ तारीख/Date of Hearing : 28/02/2023 घोषणा कᳱ तारीख /Date of Pronouncement: 09/05/2023 आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER : These appeals are preferred by the assessee against the order of the National Faceless Appeal Centre (hereinafter referred to as the Ld. CIT(A)”], passed u/s 250 of the Income-tax Act, 1961 (hereinafter the ‘Act’), for Assessment Years 2012-13, 2014-15 & 2017-18. 2. None appeared on behalf of the assessee. At the outset we find that there is a delay of 311 days. The assessee has not filed any petition for condonation of delay either. Even otherwise, we find that the assessee company had approached the National Company Law Tribunal, Kolkata for resolution and the proposal has been accepted by the NCLT, Kolkata vide order dt. 20/07/2018. The assessee has filed written submissions reflecting I.T.A. No. 747/Kol/2022 Assessment Year: 2012-13 I.T.A. No. 748/Kol/2022 Assessment Year: 2014-15 & I.T.A. No. 749/Kol/2022 Assessment Year: 2017-18 Stesalit Limited 2 the relevant portions of the resolution plan approved by the NCLT, Kolkata, stating that any dues in respect of the assesse company shall stand extinguished. The relevant portion of the resolution plan (certified copy of which is placed on record) which was approved by the NCLT, Kolkata vide its order dt. 20/07/2018, had held as follows:- “3- Unconditional Extinguishment of financial and other claims in perpetuity  On and with effect from the Effective Date, the guarantors, indemnity providers and like persons that have provided guarantees, indemnities or like arrangements for and on behalf of the Corporate Debtor, including in order to secure the Debt availed of by the Corporate Debtor, shall not be entitled to exercise or enforce any subrogation rights (or similar rights) in respect of such arrangements, even where such rights have already been exercised. On and with effect from the Effective Date, all rights and claims (whether contingent or otherwise) of whatsoever nature of every member of the Promoter Group (Existing) against the Corporate Debtor and / or its subsidiaries (including subrogation or similar rights) shall stand irrevocably and unconditionally extinguished in perpetuity  For economic sustainability on and with effect from the Effective Date, all the outstanding negotiable instruments issued by the Corporate Debtor or by any Person on behalf of the Corporate Debtor including demand promissory notes, post- dated cheques and letters of credit, shall stand terminated and the Corporate Debtor’s liability under such instruments shall stand extinguished  On and with effect from the Effective Date, the rights of any Person (whether exercisable now or in the future and whether contingent or not) to call for the allotment, issue, sale or transfer of shares or loan capital of the Corporate Debtor, whether on a change of control, or otherwise, shall stand unconditionally and irrevocably extinguished  All Claims (whether contingent or crystallized and whether or not filed) of Governmental Authorities in relation to all Taxes which the Corporate Debtor was or may be liable to pay (including with respect to financial years under assessment), all deductions and all withholding Taxes on any payment, as required under Applicable Law and pertaining to the period I.T.A. No. 747/Kol/2022 Assessment Year: 2012-13 I.T.A. No. 748/Kol/2022 Assessment Year: 2014-15 & I.T.A. No. 749/Kol/2022 Assessment Year: 2017-18 Stesalit Limited 3 prior to the Effective Date shall stand extinguished on and with effect from the Effective Date  All liabilities (whether contingent or crystallized) in relation to any corporate guarantees, indemnities and all other forms sof credits support provided by the Corporate Debtor prior to the Effective Date, and all contingent liabilities disclosed in the annual audited financial statements of the Corporate Debtor and liabilities which are not in notice of Corporate Debtor or not acknowledged by the Corporate Debtor, shall stand extinguished and discharged on and with effect from the Effective Date  On and with effect from the Effective Date, all securities s convertible or exchangeable into equity Shares and all rights to subscribe to Equity Shares, including convertible debentures, convertible preference shares. Convertible loans (whether compulsorily o Partially convertible or not), warrants. Subscription rights under shareholders agreements, shall stand immediately extinguished and settled  On approval of Resolution Plan by the NCLT the liability towards the contingent liability as mentioned in the Information Memorandum shall extinguished.  For economic viability Guarantee/ Warranty to any identity including Customer, Bank, any contractual obligations or any other identity not mentioned here (risk and cost basis) made prior to Effective Date shall stand irrevocably and unconditionally extinguished in perpetuity  Resolution Applicant shall be free to engage human capital (Workmen and Employees) on a contract basis, Fixed Term Basis, Probation basis, Regular Basis, on deputation basis or on consultant basis and shall follow own designed model of employment for its financial revival.  To control cost and for its financial revival Resolution Applicant shall be free to use any model of employment as per its discretion and, Labour / Fire / Pollution / Factory Act / PF / ESI or any other statutory Bodies shall not raise any disagreement on this.” I.T.A. No. 747/Kol/2022 Assessment Year: 2012-13 I.T.A. No. 748/Kol/2022 Assessment Year: 2014-15 & I.T.A. No. 749/Kol/2022 Assessment Year: 2017-18 Stesalit Limited 4 3. A perusal of the above reveals that, the assessee has ceased its tax liabilities making these appeals before us infructuous and the same are dismissed as such. 4. In the result, appeals of the assessee are dismissed. Order pronounced in the Court on 9 th May, 2023 at Kolkata. Sd/- Sd/- (SONJOY SARMA) (DR. MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated 09/05/2023 *SC SrPs आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent 3. संबंिधत आयकर आयुᲦ / Concerned Pr. CIT 4. आयकर आयुᲦ)अपील (/ The CIT(A)- 5. िवभागीय ᮧितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाडᭅ फाई/ Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata